“It is huge, audacious, ambitious, and the word ‘transform’ does not do it justice,” Khalid Al-Falih said of Saudi Arabia’s Vision 2030 plan.
Al-Falih, who is the Minister of Energy, Industry and Mineral Resources of Saudi Arabia, notes that the Kingdom has a solid base to build on, with the largest economy in the Middle East, a stable currency, strong fiscal position, robust consumption and world-class infrastructure. The demographics are good, with over 70% of the population aged under 25 and a school system ready to produce a “force to be reckoned with,” he said.
This base has been built on oil reserves, and Al-Falih is firm in the message that the new vision does not devalue the Kingdom’s ongoing plans to exploit its natural resources. “But a large jumbo jet doesn’t fly with one engine,” he said.
New economic engines will include mining, religious tourism, banking, finance and services. Investment will be key vehicle. For example, the Kingdom’s Public Investment Fund will transform to one of the largest – if not the largest – sovereign wealth fund in world, with $2 trillion in assets under management.
Privatization will be central among reforms, designed to reduce the reliance of public services such as health and education on government and oil funds. Minister of Commerce and Investment Majid Al-Qassabi says Vision 2030 is designed to help transition from a government-led to market-driven economic model. The government is seeking to create a more investment-friendly environment by fighting bureaucracy and revamping laws. There will be a fund to enable SMEs and stimulus funds for private sector investment.
At least two private sector leaders are enthusiastic about the vision. BlackRock Chairman and Chief Executive Officer Laurence Fink said that Saudi Arabia is one positive issue in a world of uncertainty. BlackRock is preparing to bring investor money from around the world to the Kingdom.
Dow Chemical Company Chairman and Chief Executive Officer Andrew Liveris said Vision 2030 is testimony to Saudi leaders’ efforts to understand the dynamic role of government in this century. “Where else would you find the world’s largest oil and gas producer talk about a renewables strategy?” he said. “Saudi is the greatest story never told, and we need to tell it.”
A taste of the renewable energy plans emerged in December 2016, when Saudi Aramco and GE announced plans to deliver the Kingdom’s first wind turbine. There are plans for other renewables afoot, with the government hoping to turn the Kingdom into an exporter of green energies in addition to oil and gas.
Al-Falih said the 2030 Vision is also designed to make Saudi Arabia a “softer, more pleasant place to live.” The government aspires to make people happy and make the Kingdom a model of tolerance in the Muslim world. Gender diversity and opening more opportunities for women is central to the plan.
The government is also looking inward to make savings in government operations and ensure subsidies go to the people who need it, said Minister of Finance Mohammed Al-Jadaan. Vision 2030 includes KPIs and progress that is being checked monthly
Al-Jadaan said the government recognizes the need to be predictable, accountable and consistent in its policies.